SERVICE TECHS , ARE YOU A FIRST ROUND DRAFT PICK SITTING ON THE BENCH ?

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If you understood the costs of running an HVAC business, you would realize they are not really "making a killing on labor."
A legit company with $20/hr technicians billing $100/hr for repairs wouldn't be able to keep its doors open without the markup on the parts associated with those $100/hr repairs.

I got a chance to look at opening my own company after about 6 years in the business and with the urging of some very influential customers and (believe it or not) my boss at the time, took some time and did a financial breakdown with a business plan. My findings were astonishing.

In a time when the local residential and light commercial "mom and pops" were charging $55/hr and almost no parts markup to bring in and keep business, I calculated a 10% profit margin (most industries would consider this austerity) for my one man shop at $137/hr with no parts markup and paying myself about $20/hr! I'm sure I could have made it work with the customer base and my quality of work / reputation, but growing a business where the first question out of the customer's mouth is "what's your labor rate?" would have severely limited the situation. I decided not to open the doors as a result.

An employee / tech making $20/hr costs the employer $45-50/hr with the expenses on average. Add in the overhead and support employees, van, fuel, parts stock, licensing, taxes and everything else that keeps the doors open, and it's easy to see why our industry doesn't run the 30-40% profit margins of some other industries in the US.

In the end, doesn't the sales/vs/service question come down to ethics? My code of ethics says diagnose the problem as completely as possible, place the options and the risks in front of the customer and let them decide how to spend THEIR money. This is not to say that I will give them the option to reactivate a machine that's unsafe to operate (for both their well-being and my liability), but if I believe with my best professional opinion that they can get a couple more years of useful operation from a system at a reasonable cost to operate, I'll make that clear to them. Most of my customers trust my judgement (they wouldn't let me in the door if they didn't) and I want the best for them in longevity, reliability and cost. In the end the decision is theirs... It doesn't matter if the blower is 12" in diameter or 12'. If I think a better way, an option or an upgrade will help take care of a problem for my customer, I'll suggest it and get them a price if they're interested. This attitude keeps me productive, keeps my personal numbers high enough to win awards and takes the best care of the customer that I can. It's worked for over 20 years for me now working on units from window shakers to 200+ tons in manufactured housing, residential, commercial and industrial.

Amazed at the Negative responses

Originally Posted by 2141

Could just be a lack of qualified applicants. My boss did the math and found out he talks to an average of 100 candidates before hiring 1 guy. Between poor driving record, drug testing, background checks, unprofessional appearance and whatever else it is hard to find people. Due to the difficulty we are paid $500.00 for referring techs.

Or it could be because they are crooked and offer a horrible working environment. I don't know either way...just saying they are not all bad.

Some of the Judgements that i read about my add are amazing , i am glad that i read over 20 of them to understand the mistakes i made in placing the ADD .
Here are some of the highlights that i would like to address
1) I forgot to include the Vacation in the benefits , its 1 week after 1 year,2 weeks after 2 years .3 weeks after 3 years , plus birthdays after 1 year , plus Xmas day,thanksgiving , july 4th and xmas eve , and good friday .
2) We are not a Rip off company ! the Add was misconstruid and then the thread went downhill form there
3) Why are we looking for more techs , great question , we are expanding , revenue is up 42 % in 2012 and we project 35% growth in 2013 , we still have the same 5 techs from 2012 and the same 6 installers since 2004 !
4) Service techs only run on average 4 to 5 calls per day not 10 or more as mentioned by others who read neagativly into my add
5) High stress environment , give me a break if its 105 degrees and you are replacing a blower motor in a 130 degree attic .THATS HIGH STRESS .
Any commercial techs who have not tried Residential service continue what you are doing , its not for everyone , however if you are a young residential tech who wants to see a carreer path and be trained by men with intergrity give us a call or visit our website at www.coolairsam.com
no i didnt spell check for any spell check wacko out there !

Timebuilder , i stopped looking through the thread at the 5 th page .Must have missed your comments ,however You have never met me and i have never met you , so how can you base your judgments purely on 1 post ? call me at 7134180181 Cell so we can talk .
thanks Robin
Licensed in Texas since 1983 TACLB590C
NATE Certified
EPA Certified
NCI Certified
This is our second Residential company , sold the first one in 97 to a consolidator.

I'm busy, as I am certain you are as well, so I quoted my main points for you.

If you found negativity in some of the posts, it is because of what this industry seems to have become in the residential sector. There are many guys that can smile and charm and sell a new system to replace that 4 year old dinosaur in the basement.

How many can do actual service work? I think that number is shrinking, and quickly. BUT, does that raise the wages for the talented service technician?
No, because he is being replaced with a sales technician that will make much more money for the residential contractor.

Originally Posted by timebuilder

Okay, I hope my response can shed some light for you.

I am already playing for another team (in PA) and I am beyond the draft.
(snip)

During a recent interview, the subject of future employees, 10 or 15 years from now, came up. We agreed that there would be very few guys who will want to do the work we do. Some call that a "shortage." It is not.

In aviation, they often talk about a "pilot shortage," as if there will not be enough folks able to fly airplanes. That is not true, but the actual truth applies equally to HVAC.

You see, there is never a shortage of workers.

The IS a shortage of workers who are willing to do the job for the pay being offered to work under those circumstances.

Right now, you have an ad posting that extends far beyond your local area, in an effort to recruit workers. My position is that if a company offers the right pay for the job and working conditions there is NEVER a shortage of workers!!

So, 10 or 15 years down the road, we will see 80% immigrants doing trades work, for perhaps ONE generation at the most, and their children, like the children of today, will realize that they can make just as much money writing apps for the iPhone as they can spending 50 hours a week in attics and crawl spaces, and the guys that like to diagnose and fix, instead of sell, sell, sell will be working in commercial, and looking to leave retail or residential behind them. Like me.

I hope that helps to give you a new perspective.

Rather then being negative, my intention is to enlighten. I hope this helps.

Look lets face it. Residential work is the minor leagues. Class A minor league. Any yahoo can do residential work out of the trunk of his car. I've seen it.

Now commercial work is triple-A.

Chillers is major league.

Don't like it? Work hard, learn more, and move up the ranks. I did.

Will you ever stop giving us your resume?

The last guy I worked with that did that almost killed everyone in a 4 story office building after replacing an inducer motor with the wheel installed backwards. He too was a top notch chiller guy, at least thats what he kept telling me every time I saw him.

Look lets face it. Residential work is the minor leagues. Class A minor league. Any yahoo can do residential work out of the trunk of his car. I've seen it.

Now commercial work is triple-A.

Chillers is major league.

Yawn Back in the 80's, we maintained Turbo Ice Makers that made 80 tons per day with 200 hp screw compressors. Even converted them from factory water defrost to hot gas...a design they later copied....So...Flippin...What ?

Certainly, chiller work is good work that pays well. But that work, or its position in the industry food pyramid, is not the issue.

The issue is whether the residential sector, with the most HVAC workers, can increase its the attractiveness to draw in talented workers, when there are many other venues for those individuals to be employed.

With the increase in software development, and the lack of education of middle class kids in math and science, where will the resi techs of the future come from?

Will the industry be dumbed-down by self-diagnostic microprocessors telling the tech which part to replace??

Will equipment service life be further shortened so that replacing four year old systems actually becomes justified??

With all the choices of today, you have to be willing to pay and train and reward good techs if you want them. If you act like the tech is a sales guy, you won't have techs that can diagnose and repair.

This creates a niche for companies that have guys that CAN repair, but you will have to PAY them.

I have only been in the trade since 2006, so i'm not a seasoned vet, but i have noticed a few things in my general area. There are a few companies in our area that pay their techs flat rate + parts sales commission. I have seen/met some very good techs from these companies, but also some very very bad ones. I came upon an 18 year-old RTU that had been pretty much overhauled. the only things that had not been replaced included the condensing coil and the RTU chassis. Everything else was new and dated. it had all been done in two consecutive days. The operations manager returned from vacation to find the outrageous bill and terminated their service contract. the following day the service manager showed up and tried to buy back the contract. In my opinion flat rate and commission from sales can turn even the most trustworthy, honest tech into a deceitful one. I can't speak for anyone but myself, but i have mouths to feed at home and if my paycheck depended on parts commission i would be selling parts left and right. In our area anyway its just not in the best interest of the customer.

On the other hand, I have had clients who will steadfastly avoid replacing a unit like the one you described. They instead will pay nearly the cost of a new unit for repairs, as long as it is less than the replacement cost. The difference is the accounting for repairs versus a capital expenditure.

In the case you described, not all of those parts may have failed, and that is the problem with making pay dependent upon the number of parts a tech can replace.